A National Labor Relations Board Administrative Law Judge (ALJ) recently ruled that a hospital’s policy of strict confidentiality regarding peer review committee investigations violated federal law. The decision, issued on December 23, 2013, reflects the growing trend of National Labor Relations Board (NLRB) rulings (Piedmont Gardens and Banner Estrella Medical Center) that signal the NLRB’s increasing aversion to what it views as overly broad confidentiality requirements.

Employers should take note of this trend and continue to take care in drafting confidentiality provisions concerning workplace investigations. They also should avoid overly broad restrictions in employee communications about those investigations without a sound business justification.

In Menorah Medical Center, a Kansas acute-care hospital created an internal risk management program to comply with state law requiring it to maintain procedures for investigating potentially reportable violations of patient care standards. The hospital’s program included a nursing peer review committee that focused only on incidents involving nurses. The committee could refer nurses for potential disciplinary action or, if an event was serious enough, it could report its findings to the state Board of Nursing.

State law provided:

[T]he reports, statements, memoranda, proceedings, findings and other records submitted to or generated by peer review committees or officers shall be privileged and shall not be subject to discovery, subpoena or other means of legal compulsion for their release to any person or entity or be admissible in evidence in any judicial or administrative proceeding. Information contained in such records shall not be discoverable or admissible at trial in the form of testimony by an individual who participated in the peer review process.

Interpreting the statute broadly, the hospital devised a confidentiality provision that was approved by the state. This provision specified:

No Hospital employee, Medical Staff Member, or Allied Health Professional shall disclose information concerning reportable incidents except to their superiors, Hospital Administrators, the Risk Manager, the appropriate Hospital and Medical Staff committees, legal counsel for the Hospital, or the applicable licensing agencies, unless authorized to do so by the Risk Manager, Administration, or legal counsel.

After two nurses received letters to appear before the peer review committee for its investigation into allegations of unprofessional conduct that could provide “grounds for disciplinary action,” the hospital denied the nurses’ requests for union representation at their meetings. The hospital asserted that the meetings were open only to the target of the investigation and the committee members. While the nurses were not ultimately disciplined, they each claimed that they were confused and frightened by the severe implications of their letters. The union filed several unfair labor practice charges.

The ALJ determined that the hospital’s confidentiality rule violated Section 8(a)(1) of the National Labor Relations Act (NLRA) because it limited employees’ Section 7 rights to engage in protected, concerted activity. The prohibition imposed on the employees that barred the employees mentioning that investigation to anyone was “overly broad and unlawful on its face.” Not only did the ban restrict employees’ rights to discuss potential discipline and working conditions with each other, it was a clear restraint on employees’ ability to obtain evidence in support of a defense against a charge of misconduct or to speak with their union representative in seeking assistance with such a defense.

The ALJ rejected the hospital’s business justifications that state law required its confidentiality clause and that the clause was necessary to protect the integrity of its investigations and prevent the compromise of patient care. The ALJ concluded that, while it was undisputed that the clause was modeled on state law, the hospital had conceded that the clause was only its interpretation of that law. The law was silent on whether a union could represent targets of investigation or whether a target could discuss the proceeding with others. Moreover, the hospital failed to provide evidence that confidentiality would guarantee integrity or patient safety without “tramp[ling]” on the rights of its employees to engage in protected, concerted activity.

The ALJ also ruled that the hospital violated federal law when it both denied the nurses the right to have union representatives present during their peer review proceedings and failed to respond to union requests for information about the peer review process that were “presumptively relevant” to the union’s role as a bargaining representative.

Ballard Spahr’s Labor and Employment Group routinely assists employers in NLRA compliance in conducting investigations. If you have questions or concerns regarding compliance in this context, please contact Timothy F. McCormack at 410.528.5680 or mccormackt@ballardspahr.com, or the member of the Group with whom you work.


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